GlaxoSmithKline Plc has agreed to pay $460 million to settle thousands of lawsuits over its Avandia diabetes pill, Bloomberg reported on Tuesday, on the eve of a crucial vote by U.S. experts on whether the pill should be withdrawn due to heart risks.

Bloomberg, citing people familiar with the settlements, said the U.S. review was a factor in the decision by Glaxo officials to start negotiating with lawyers for former Avandia users.

It said Britain-based Glaxo would settle about 10,000 suits for an average of $46,000 each. A Glaxo spokeswoman declined to comment. Plaintiffs' lawyers reached by Reuters also could not confirm a settlement.

Shares of Glaxo closed up 1.7 percent in New York trading, easily beating a 0.2 percent increase in the S&P pharmaceutical index.

Avandia's U.S. sales were just 1.5 percent of Glaxo's 2009 revenues, but investors fear withdrawal from the market could spark further patient lawsuits.

Scientific experts assembled by the FDA are holding a two-day meeting to sort through sharply conflicting data and opinions on whether Avandia causes heart attacks.

They are due to vote on Wednesday on recommendations ranging from ranging from keeping the drug on the market to recommending a withdrawal. Restrictions on use or beefing up a 2007 heart warning are among other choices.

Because the FDA asked panelists to select only one of the five options, there may be no clear majority.

The debate on Avandia's safety has raged since warnings were placed on the drug in 2007 saying some research shows a link with a higher heart attack risk but the data is inconclusive.

Two U.S. senators released internal company documents on Tuesday they said showed Glaxo sought to downplay scientific findings about Avandia's safety as far back as 2000, shortly after the drug was approved.

Added pressure on Avandia is coming from the European Medicines Agency, which has launched a new review into the drug's risks and benefits.


FDA staff are deeply divided over the safety of Avandia, also known as rosiglitazone, and the agency has thrown the issue to the expert panel to untangle.

Dr. David Graham, an FDA reviewer who has pushed for Avandia's withdrawal for years, said the agency applies different standards when deciding whether to approve a drug versus determining risk after a medicine is on the market.

Graham said the Record study relied on by Glaxo to show no increased heart attack risk from Avandia compared to older diabetes drugs would not pass muster for an approval. You wouldn't even hear about it because it's garbage, he said.

Dr. Ellis Unger, a deputy director of drug evaluation said he found Record's results pretty reassuring on heart safety.

But he added it was up to the expert panel to decide if Record was legitimate.

Can we trust the sponsor (Glaxo) with the results of Record? I think that is something the committee is going to need to think about, Unger said.

Panelists asked some questions of Tuesday's presenters but gave little hint on how they were leaning.

It's hard to say if GSK was helped or hurt by today's events, said Ira Loss, an analyst who follows the FDA for Washington Analysis.


Glaxo officials defended Avandia before the advisers saying diabetes was a serious disease that needed multiple treatment options to control blood sugar and prevent devastating complications including amputations and blindness.

When used appropriately, (Avandia) has a positive benefit/risk profile and should remain a treatment for type 2 diabetes, said Dr. Murray Stewart, a Glaxo vice president for drug research and development.

For the FDA, the case is seen as a test of how the agency will handle major controversies under Democratic President Barack Obama. Officials are facing heavy pressure from consumer groups and some lawmakers who say the FDA fumbled decisions in past administrations and failed to protect the public.

Some FDA staff see the Glaxo drug as more dangerous to the heart than Takeda Pharmaceutical Co's rival diabetes pill, Actos, with no unique benefits.

An ongoing study comparing Avandia and Actos could provide a more definitive answer but critics argue it is wrong to wait years for those results. They say findings against Avandia are strong enough now to warrant the drug's removal.

An outspoken critic, Dr. Steven Nissen, said there was enough evidence to conclude Actos was a safer option and Avandia offered no benefits over other diabetes drugs.

Continued marketing of rosiglitazone cannot be medically or ethically justified, said Nissen, head of cardiology at the Cleveland Clinic in Ohio.

Senate Finance Committee Chairman Max Baucus, a Democrat, and the committee's top Republican, Charles Grassley, said they were very concerned Glaxo appeared to have failed to tell regulators about adverse findings in a timely manner.

Several documents released by the senators referred to a Glaxo study finding a potential heart advantage for Takeda's Actos over Avandia.

Glaxo said the documents were being taken out of context and represented only a small percent of the documents provided to plaintiffs' attorneys in Avandia product liability litigation. (Reporting by Lisa Richwine; Editing by Tim Dobbyn)